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How to Teach Kids Age Appropriate Lessons about Money

It can be hard for parents to teach their children about the value of money when money is becoming invisible.

Paying on plastic is convenient (sometimes, a little too convenient), but think of how it appears to a five year old. They see mum or dad hand over a piece of plastic and in return they get a bunch of groceries and sometimes even  extra cash – bonus!

The good news is that the Australian Securities and Investments Commission (ASIC) has helped introduce financial literacy into Australian schools within maths, science and English.

School students from Foundation to Year 10 in schools across Australia are now being taught to be smarter consumers and better money managers.

ASIC’s MoneySmart Teaching program provides a range of resources to help schools teach their students about key financial principles such as planning, spending and  saving and encourage them to use their knowledge and financial literacy skills in their day-to-day lives.

As a parent, you also play a critical role in helping your children develop good money habits. But where do you start?

Here are some suggestions for different age groups, based on what’s being taught in ASIC’s MoneySmart Teaching program.

Show me the money!

Ages 4-6: Show your child the value of money by helping them become familiar with coins and notes. Let them pay for items at the supermarket. Talk about how paying on credit is borrowed money that you need to pay back and how it costs more than saving for what you want.

But I really NEED it

Mum and daughter figure out budget
Mum and daughter figure out budget

Ages 7-8: Talk to your child about needs and wants, especially when they ask for things. Do they really need it? Or is it something they can live without?

Demonstrate to your child that you’re willing to put aside personal wants in order to meet the needs of the family and others.

Try planning a meal within a fixed budget. Get your child to decide which items are the most important and discuss why. Compare brands to minimise costs and meet the budget.

Become advertising detectives

Ages 8 – 9: Talk about ads you see to help your child become  a critical consumer. Is the product really as good as it looks in the ad? Or is the ad selling an image rather than the reality?

Explain how ads use certain techniques to make us want to buy products.

Help your child learn to spot common advertising tricks such as:

  • celebrity endorsement – just because a well known person endorses a product doesn’t mean it’s the best.
  • emotional appeal – does the ad give you strong feelings about a situation or product?; dubious claims – hype like “the best” when it is identical to other brands;
  • words like “free” and “limited offer” that create a sense of urgency but may have a hidden downside.

Budget for a big day out

Ages 9 – 10: Plan your next family day out together within a set budget per person or use ASIC’s activity, ‘Fun Day Out’ to do a mock version. Discuss what you’d like to do, how you’ll get there, what you’ll eat and how much money you’ll have left over for a treat at the end.  Write a budget and do the calculations along the way.

Cover the costs of mobile phones

Mobile phones for kids in Brisbane
Mobile phones for kids in Brisbane

Ages 11 – 12: Look together at the costs associated with a mobile phone. Look at how much each call, text or download costs. 22% of 9–11 year olds own a mobile phone. This jumps to 73% for 12–14 year olds.

ASIC has produced a series of mobile phone activities that you can do at home with your children  based on real life situations. Topics include choosing a plan, the cost of calls, text and browsing the web, social media, entertainment/games, premium services, how mobile phone advertising works and how to avoid running out of credit.

Plan ahead with financial goals

Ages 10+: Talk about financial goals. What do they want? How much should be saved each week for this target? How long will it take to achieve with a savings plan?

Bulimba State School is one of the MoneySmart Schools in Brisbane. If you would like your child’s school to be part of the MoneySmart Teaching program, it might be worth mentioning it to your child’s teacher or principal and encouraging them to visit ASIC’s  MoneySmart Teaching website at teaching.moneysmart.gov.au. All teaching materials can be downloaded for free.

This article was first published in Issue 2 of our printed magazine on 1 February, 2014.

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Janine Mergler

Janine Mergler is a veteran Queensland teacher, graduating from QUT with a BEd majoring in Social Sciences. After many years in the classroom, Janine moved on to academia. She has proudly trained new generations of teachers in her role as a lecturer at Queensland University of Technology Faculty of Education. She has also worked in the Queensland Government as an education specialist, developing education resources and delivering community awareness programs to help families conserve water. Currently she is the owner and editor of Families Magazine, a publication specifically targeted at parents who value a quality education for children.  Janine leads a team of professionals who write about family lifestyle, early childhood, schools and education information and family-friendly events.

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